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Asked by

Community Member

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Accounting & Taxes

When calling capital, does a VC state whether the called capital will go to investments or to management fees?

Question edited for clarity. 
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Answered by

Haw Kuo

on

Venture Capital funds typically do not specify whether a capital call is for investment or management fees when requesting funds from Limited Partners (LPs). The capital call is generally used to cover both investments and ongoing expenses such as management fees, legal and accounting fees, and other operational costs. The specific allocation of the funds is determined by the fund manager as per the terms of the Limited Partnership Agreement (LPA).

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